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Grocery Store Forced to Change Gas Discount Policy

Lawsuit decides that current program violated minimum markup law.

July 30, 2006, 08:00 pm

JANESVILLE, Wis. -- Woodman's Food Markets, operators of 11 stores in Wisconsin and Illinois, has altered its gas discount program after it lost a lawsuit filed by Kwik Trip that stated the grocer was violating the state's law on minimum markup for gasoline, The Associated Press reported.

The original program gave customers 3 cents off a gallon of gasoline when they showed a receipt from the grocery store. Kwik Trip filed a lawsuit against the grocer, stating that the 3 cent discount made the price of gas lower than the minimum markup, the AP reported.

The new program, beginning next week, gives drivers $1 off the purchase of $30 worth of gas when they show a $50 receipt for groceries, said Woodman's president Phil Woodman in the report.

Jeremy McPherson, director of business trade practices for the state Department of Agriculture, Trade and Consumer Protection, told the AP that abandoning the rebate policy was clearly in response to a judge's determination that Woodman's practice violated the minimum markup law.

In the same ruling, Kwik Trip was banned from printing $1-off gas coupons. This decision was based on Woodman's original lawsuit against Kwik Trip's $1-off coupons. Kwik Trip responded to the grocer's suit by challenging its 3 cent program, the report stated.

"They both won, and they both lost," McPherson told the AP.

Since then, Kwik Trip stopped printing the coupons, but Woodman's sued the Department of Agriculture, Trade and Consumer Protection, against their ruling that allows Kwik Trip to offer 3 cent discounts to credit card customers. In January, Dane County Circuit Judge Michael Nowakowski ruled against Woodman's, according to the report.

The minimum markup law for the state requires pump prices to be 9.18 percent higher than the wholesale price, although an exception states that retailers can lower prices below the markup to match a competitor. In May, the state's Senate killed a measure to end the minimum markup law, reported the AP.